Statement of Objects and Reasons
appended to the Constitution
(Seventy-third Amendment) Bill, 1991 which was enacted as
the Constitution (Seventy-fourth
Amendment) Act, 1992

STATEMENT OF OBJECTS AND REASONS

In many States local bodies
have become weak and ineffective on
account of a variety of reasons, including the failure to hold regular
elections, prolonged supersessions and inadequate devolution of powers
and functions. As a result, Urban Local Bodies are not
able to
perform effectively as vibrant democratic units of self-government.

2. Having regard to these
inadequacies, it is considered necessary
that provisions relating to Urban Local Bodies are incorporated in the
Constitution particularly for-

(i) putting on a firmer footing the
relationship between the State
Government and the Urban Local Bodies with respect to-

3. Accordingly, it is
proposed to add a new part relating to the
Urban Local Bodies in the Constitution to provide for-

(a) constitution of three types of Municipalities:

(i) Nagar Panchayats for areas in
transition from a rural area to
urban area;

(ii) Municipal Councils for smaller urban areas;

(iii) Municipal Corporations for larger urban areas.

The broad criteria for specifying the said
areas is being provided in
the proposed article 243-0;

(b) composition of Municipalities, which will
be decided by the
Legislature of a State, having the following features:

(i) persons to be chosen by direct election;

(ii) representation of Chairpersons of
Committees, if any, at ward
or other levels in the Municipalities;

(iii) representation of persons having special
knowledge or experience
of Municipal Administration in Municipalities (without voting rights);

(c) election of Chairpersons
of a Municipality in the manner
specified in the State law;

(d) constitution of Committees at ward level or
other level or levels
within the territorial area of a Municipality as may be provided in
the State law;

(e) reservation of seats in every Municipality-

(i) for Scheduled Castes and Scheduled Tribes
in proportion to their
population of which not less than one-third shall be for women;

(ii) for women which shall not less than one-third of
the total number
of seats;

(iii) in favour of backward class of
citizens if so provided by the
Legislature of the State;

(iv) for Scheduled Castes, Scheduled Tribes and women
in the office of
Chairpersons as may be specified in the State law;

(f) fixed tenure of 5 years for the
Municipality and re-election
within six months of end of tenure. If a Municipality is dissolved
before expiration of its duration, elections to be held
within a
period of six months of its dissolution;

(g) devolution by the State Legislature of powers and
responsibilities
upon the Municipalities with respect to preparation of plans
for
economic development and social justice, and for the implementation of
development schemes as may be required to enable them to function as
institutions of self-government;

(h) levy of taxes and duties by
Municipalities, assigning of such
taxes and duties to Municipalities by State Governments and for making
grants-in-aid by the State to the Municipalities as may be provided in
the State law;

(i) a Finance Commission to review the finances
of the Municipalities
and to recommend principles for-

(1) determining the taxes which may be assigned to
the Municipalities;

(2) Sharing of taxes between the State and
Municipalities;

(3) grants-in-aid to the Municipalities from
the Consolidated Fund of
the State;

(j) audit of accounts of the Municipal Corporations
by the Comptroller
and Auditor-General of India and laying of
reports before the
Legislature of the State and the Municipal Corporation concerned;

(k) making of law by a State Legislature with
respect to elections to
the Municipalities to be conducted under
the superintendence,
direction and control of the chief electoral officer of the State;

(l) application of the provisions of the Bill
to any Union territory
or part thereof with such modifications as may be specified by the
President;

(m) exempting Scheduled areas referred to
in clause (1), and tribal
areas referred to in clause (2), of article 244, from the application
of the provisions of the Bill. Extension of provisions of the Bill to
such areas may be done by Parliament by law;

(n) disqualifications for membership of a
Municipality;

(o) bar of jurisdiction of Courts in matters relating
to elections to
the Municipalities.

4. The Bill seeks to achieve the aforesaid
objectives.

NEW DELHI;
SHEILA KAUL.

The 11th September, 1991.

THE
CONSTITUTION (SEVENTY-FOURTH AMENDMENT) ACT, 1992

ACT, 1992

[20th April, 1993.]

An Act further to amend the Constitution of India.

BE it enacted by Parliament in the Forty-third Year
of the Republic of
India as follows:-

1. Short title and
commencement.-(1) This Act may be called the
Constitution (Seventy-fourth Amendment) Act, 1992.

(2) It shall come into
force on such date_681 as the Central
Government may, by notification in the Official Gazette, appoint.

2. Insertion of new Part
IXA.-After Part
IX of the Constitution, the
following Part shall be inserted, namely:-

(c) "Metropolitan area" means an area
having a population of ten lakhs
or more, comprised in one or more districts and consisting of two or
more Municipalities or Panchayats or other contiguous areas, specified
by the Governor by public notification to be a Metropolitan area for
the purposes of this Part;

(d) "Municipal area" means the
territorial area of a Municipality as
is notified by the Governor;

(g) "population" means
the population as ascertained at the last
preceding census of which the relevant figures have been published.

243Q. Constitution of Municipalities.-(1)
There shall be constituted
in every State,-

(a) a Nagar Panchayat (by whatever name
called) for a transitional
area, that is to say, an area in transition from a rural area to an
urban area;

(b) a Municipal Council for a smaller urban area; and

(c) a Municipal Corporation for a larger
urban area,

in accordance with the provisions of this Part:

Provided that a Municipality under this clause
may not be constituted
in such urban area or part thereof as the Governor may, having regard
to the size of the area and the municipal services being provided or
proposed to be provided by an industrial establishment in that area
and such other factors as he may deem fit, by public notification,
specify to be an industrial township.

(2) In this article, "a transitional
area", "a smaller urban area" or
"a larger urban area" means such area as the Governor
may, having
regard to the population of the area, the density of the population
therein, the revenue generated for local
administration, the
percentage of employment in non-agricultural activities, the economic
importance or such other factors as he may deem fit, specify by public
notification for the purposes of this Part.

243R. Composition of Municipalities.- (1)
Save as provided in clause
(2), all the seats in a Municipality shall be filled by persons chosen
by direct election from the territorial
constituencies in the
Municipal area and for this purpose each Municipal area
shall be
divided into territorial constituencies to be known as wards.

(2) The Legislature of a State may, by law, provide-

(a) for the representation in a Municipality of-

(i) persons having special
knowledge or experience in Municipal
administration;

(ii) the members of the House of the
People and the members of the
Legislative Assembly of the State representing constituencies which
comprise wholly or partly the Municipal area;

(iii) the members of the Council of
States and the members of the
Legislative Council of the State registered as electors within the
Municipal area;

(iv) the Chairpersons of the Committees
constituted under clause (5)
of article 243S:

Provided that the persons referred to in
paragraph (i) shall not have
the right to vote in the meetings of the Municipality;

(b) the manner of election of the Chairperson of a
Municipality.

243S. Constitution and
composition of Wards Committees, etc.-(1)
There shall be constituted Wards Committees, consisting of one or more
wards, within the territorial area of a
Municipality having a
population of three lakhs or more.

(2) The Legislature of a
State may, by law, make provision with
respect to-

(a) the composition and the territorial area of a
Wards Committee;

(b) the manner in which the
seats in a Wards Committee shall be
filled.

(3) A member of a
Municipality representing a ward within the
territorial area of the Wards Committee shall be a member of
that
Committee.

(4) Where a Wards Committee consists of-

(a) one ward, the member representing that ward
in the Municipality;
or

(b) two or more wards, one of the members
representing such wards in
the Municipality elected by the members of the Wards Committee,

shall be the Chairperson of that Committee.

(5) Nothing in this article shall be deemed to
prevent the Legislature
of a State from making any provision for
the constitution of
Committees in addition to the Wards Committees.

243T. Reservation of
seats.-(1) Seats shall be reserved for the
Scheduled Castes and the Scheduled Tribes in every Municipally and the
number of seats so reserved shall bear, as nearly as may be, the same
proportion to the total number of seats to be filled
by direct
election in that Municipality as the population of the
Scheduled
Castes in the Municipal area or of the Scheduled
Tribes in the
Municipal area bears to the total population of that area and such
seats may be allotted by rotation to different constituencies in a
Municipality.

(2) Not less than one-third of the
total number of seats reserved
under clause (1) shall be reserved for women belonging to the
Sche-
duled Castes or, as the case may be, the Scheduled Tribes.

(3) Not less than one-third (including
the number of seats reserved
for women belonging to the Scheduled Castes and the Scheduled Tribes)
of the total number of seats to be filled by direct election in every
Municipality shall be reserved for women and such
seats may be
allotted by rotation to different constituencies in a Municipality.

(4) The officers of
Chairpersons in the Municipalities shall be
reserved for the Scheduled Castes, the Scheduled Tribes and women in
such manner as the Legislature of a State may, by law, provide.

(5) The reservation of seats
under clauses (1) and (2) and the
reservation of offices of Chairpersons (other than the reservation for
women) under clause (4) shall cease to have effect on the expiration
of the period specified in article 334.

(6) Nothing in this Part shall prevent the
Legislature of a State from
making any provision for reservation of seats in any Municipality or
offices of Chairpersons in the Municipalities in favour of backward
class of citizens.

243U. Duration of
Municipalities, etc.-(1) Every Municipality,
unless sooner dissolved under any law for the time being in force,
shall continue for five years from the date appointed for its first
meeting and no longer:

Provided that a Municipality shall be given a
reasonable opportunity
of being heard before its dissolution.

(2) No amendment of any law for the time being in
force shall have the
effect of causing dissolution of a Municipality at any level, which is
functioning immediately before such amendment, till the expiration of
its duration specified in clause (1).

(3) An election to constitute a Municipality shall be
completed,-

(a) before the expiry of its duration specified in
clause (1);

(b) before the expiration of a period of six
months from the date of
its dissolution:

Provided that where the
remainder of the period for which the
dissolved Municipality would have continued is less than six months,
it shall not be necessary to hold any election under this clause for
constituting the Municipality for such period.

(4) A Municipality constituted
upon the dissolution of a Muni-
cipality before the expiration of its duration shall continue only for
the remainder of the period for which the dissolved Municipality would
have continued under clause (1) had it not been so dissolved.

243V. Disqualifications for
membership.-(1) A person shall be
disqualified for being chosen as, and for being, a
member of a
Municipality-

(a) if he is so disqualified by or under any law for
the time being in
force for the purposes of elections to the Legislature of the State
concerned:

Provided that no person shall be disqualified on the
ground that he is
less than twenty-five years of age, if he has attained the age
of
twenty-one years;

(b) if he is so
disqualified by or under any law made by the
Legislature of the State.

(2) If any question arises as to whether
a member of a Municipality
has become subject to any of the disqualifications mentioned in clause
(1), the question shall be referred for the decision of such authority
and in such manner as the Legislature of a State may, by law, provide.

243W. Powers, authority and responsibilities of
Municipalities, etc.-
Subject to the provisions of this Constitution, the Legislature of a
State may, by law, endow-

(a) the Municipalities with
such powers and authority as may be
necessary to enable them to function
as institutions of
self-government and such law may contain provisions for the devolution
of powers and responsibilities upon Municipalities, subject to such
conditions as may be specified therein, with respect to-

(i) the preparation of plans for
economic development and social
justice;

(ii) the performance of functions and the
implementation of schemes as
may be entrusted to them including those in relation to the matters
listed in the Twelfth Schedule;

(b) the Committees with such powers and
authority as may be necessary
to enable them to carry out the responsibilities conferred upon them
including those in relation to the matters listed in the
Twelfth
Schedule.

243X. Power to impose taxes by, and Funds of,
the Municipalities.-The
Legislature of a State may, by law,-

(a) authorise a Municipality to levy,
collect and appropriate such
taxes, duties, tolls and fees in accordance with such procedure and
subject to such limits;

(b) assign to a Municipality such taxes, duties,
tolls and fees levied
and collected by the State Government for such purposes and subject to
such conditions and limits;

(c) provide for making such grants-in-aid to
the Municipalities from
the Consolidated Fund of the State; and

(d) provide for constitution of such
Funds for crediting all moneys
received, respectively, by or on behalf of the Municipalities and also
for the withdrawal of such moneys therefrom.

as may be specified in the law.

243Y. Finance Commission.-(1)
The Finance Commission constituted
under article 243-I shall also review the financial position of the
Municipalities and make recommendations to the Governor as to-

(a) the principles which should govern-

(i) the distribution between the State and the
Municipalities of the
net proceeds of the taxes, duties, tolls and fees leviable by
the
State, which may be divided between them under this Part and
the
allocation between the Municipalities at all
levels of their
respective shares of such proceeds;

(ii) the determination of the taxes, duties,
tolls and fees which may
be assigned to, or appropriated by, the Municipalities;

(iii) the grants-in-aid to the
Municipalities from the Consolidated
Fund of the State;

(b) the measures needed to improve
the financial position of the
Municipalities;

(c) any other matter referred
to the Finance Commission by the
Governor in the interests of sound finance of the Municipalities.

(2) The Governor shall cause
every recommendation made by the
Commission under this article together with an explanatory memorandum
as to the action taken thereon to be laid before the Legislature of
the State.

243Z. Audit of accounts of Municipalities.-The
Legislature of a State
may, by law, make provisions with respect to the
maintenance of
accounts by the Municipalities and the auditing of such accounts.

243ZA. Elections to the
Municipalities.-(1) The superintendence,
direction and control of the preparation of electoral rolls for, and
the conduct of, all elections to the Municipalities shall be vested in
the State Election Commission referred to in article 243K.

(2) Subject to the provisions of this Constitution,
the Legislature of
a State may, by law, make provision with respect to
all matters
relating to, or in connection with, elections to the Municipalities.

243ZB. Application to Union
territories.-The provisions of this Part
shall apply to the Union territories and shall, in their application
to a Union territory, have effect as if the references to the Governor
of a State were references to the Administrator of the Union territory
appointed under article 239 and references to the Legislature or the
Legislative Assembly of a State were references in relation to a Union
territory having a Legislative Assembly, to that Legislative Assembly:

Provided that the President may, by public
notification, direct that
the provisions of this Part shall apply to any Union territory or part
thereof subject to such exceptions and modifications as he may specify
in the notification.

243ZC. Part not to apply to certain
areas.-(1) Nothing in this Part
shall apply to the Scheduled Areas referred to in clause (1), and the
tribal areas referred to in clause (2), of article 244.

(2) Nothing in this Part shall be
construed to affect the functions
and powers of the Darjeeling Gorkha Hill Council constituted under any
law for the time being in force for the hill areas of the district of
Darjeeling in the State of West Bengal.

(3) Notwithstanding anything in this
Constitution, Parliament may, by
law, extend the provisions of this Part to the Scheduled Areas and the
tribal areas referred to in clause (1) subject to such exceptions and
modifications as may be specified in such law, and no such law shall
be deemed to be an amendment of this Constitution for the purposes of
article 368.

243ZD. Committee for
district planning.-(1) There shall be
constituted in every State at the district level a District Planning
Committee to consolidate the plans prepared by the Panchayats and the
Municipalitiies in the district and to prepare a draft development
plan for the district as a whole.

(2) The Legislature of a
State may, by law, make provision with
respect to-

(a) the composition of the District Planning
Committees;

(b) the manner in which the seats in such Committees
shall be filled:

Provided that not less than four-fifths of the total
number of members
of such Committee shall be elected by, and from amongst, the elected
mambers of the Panchayat at the district
level and of the
Municipalities in the district in proportion to the ratio between the
population of the rural areas and of the urban areas in the district;

(c) the functions relating to district planning which
may be assigned
to such Committees;

(d) the manner in which the Chairpersons of such
Committees shall be
chosen.

(3) Every District Planning Committee
shall, in preparing the draft
development plan,-

(a) have regard to-

(i) matters of common
interest between the Panchayats and the
Municipalities including spatial planning, sharing of water and other
physical and natural resources, the integrated
development of
infrastructure and environmental conservation;

(ii) the extent and type of available resources
whether financial or
otherwise;

(b) consult such institutions and organisations
as the Governor may,
by order, specify.

(4) The Chairperson of every District Planning
Committee shall forward
the development plan, as recommended by such
Committee, to the
Government of the State.

243ZE. Committee for Metropolitan
planning.-(I) There shall be
constituted in every Metropolitan area a
Metropolitan Planning
Committee to prepare a draft development plan for the Metropolitan
area as a whole.

(2) The Legislature of a
State may, by law, make provision with
respect to-

(a) the composition of the Metropolitan Planning
Committees;

(b) the manner in which the seats in such Committees
shall be filled:

Provided that not less than
two-thirds of the members of such
Committee shall be elected by, and from amongst, the elected members
of the Municipalities and Chairpersons of the Panchayats
in the
Metropolitan area in proportion to the ratio between the population of
the Municipalities and of the Panchayats in that area;

(c) the representation in such Committees of
the Government of India
and the Government of the State and of such
organisations and
institutions as may be deemed necessary for carrying out the functions
assigned to such Committees;

(d) the functions relating to
planning and coordination for the
Metropolitan area which may be assigned to such Committees;

(e) the manner in which the Chairpersons of
such Committees shall be
chosen.

(3) Every Metropolitan Planning
Committee shall, in preparing the
draft development plan,-

(a) have regard to-

(i) the plans prepared by the Municipalities and the
Panchayats in the
Metropolitan area;

(ii) matters of common interest between
the Municipalities and the
Panchayats, including co-ordinated spatial planning of the
area,
sharing of water and other physical and natural
resources, the
integrated development of infrastructure
and environmental
conservation;

(iii) the overall objectives and priorities set
by the Government of
India and the Government of the State;

(iv) the extent and nature of investments
likely to be made in the
Metropolitan area by agencies of the Government of India and of the
Government of the State and other available
resources whether
financial or otherwise;

(b) consult such institutions and organisations
as the Governor may,
by order, specify.

(4) The Chairperson of every Metropolitan
Planning Committee shall
forward the development plan, as recommended by such Committee, to the
Government of the State.

243ZF. Continuance of
existing laws and Municipalities.-
Notwithstanding anything in this Part, any provision of
any law
relating to Municipalities in force in a State immediately before the
commencement of THE CONSTITUTION (Seventy-fourth Amendment) Act, 1992,
which is inconsistent with the provisions of this Part, shall continue
to be in force until amended or repealed by a competent Legislature or
other competent authority or until the expiration of one year from
such commencement, whichever is earlier:

Provided that all the Municipalities existing
immediately before such
commencement shall continue till the expiration of their duration,
unless sooner dissolved by a resolution passed to that effect by the
Legislative Assembly of that State or, in the case of a State having a
Legislative Council, by each House of the Legislature of that State.

243ZG. Bar to interference
by courts in electoral matters.-
Notwithstanding anything in this Constitution,-

(a) the validity of any
law relating to the delimitation of
constituencies or the allotment of seats to such constituencies, made
or purporting to be made under article 243ZA shall not be called in
question in any court;

(b) no election to any Municipality shall be called
in question except
by an election petition presented to such authority and in such manner
as is provided for by or under any law made by the Legislature of a
State.'.

3. Amendment of article 280.- In
clause (3) of article 280 of the
Constitution, sub-clause (c) shall be relettered as sub-clause (d) and
before sub-clause (d) as so relettered, the following sub-clause shall
be inserted, namely:-

"(c) the measures needed to augment the
Consolidated Fund of a State
to supplement the resources of the Municipalities in the State on the
basis of the recommendations made by the Finance Commission of the
State;".

4. Addition of Twelfth Schedule.-After
the Eleventh Schedule to the
Constitution, the following Schedule shall be added, namely:-